Solar groups challenge FERC Broadview order reversing 40 years of PURPA precedent

Source: By Catherine Morehouse, Utility Dive • Posted: Thursday, October 8, 2020

  • A solar industry trade group on Monday challenged federal regulators’ ruling that disqualified a facility from receiving payments under the Public Utility Regulatory Policies Act (PURPA).
  • Following the Sept. 1 challenge of two small solar developers — Pine Gate Renewables and Southern Current — the Solar Energy Industries Association (SEIA) filed a request for rehearing with the Federal Energy Regulatory Commission on its September ruling that denied qualifying facility (QF) status to a Montana solar facility. FERC rejected Broadview Solar’s status on the grounds that its gross capacity exceeds the 80 MW threshold limit for QFs, despite nearly 40 years of precedent that says a facility’s eligibility under PURPA should be set by net capacity.
  • SEIA said in its remarks that because FERC just six weeks before the Broadview ruling had issued a final rule on PURPA that does not address this precedent, the commission is in violation of the Administrative Procedure Act (APA) and guilty of an “abuse of discretion.”

Dive Insight:

PURPA has been a hot button topic for a long time, but focus on the 42-year-old law has heightened over the past year since FERC issued a Notice of Proposed Rulemaking (NOPR) on it in September of 2019, and a subsequent final rule in July.

In neither of those proceedings did the commission weigh whether to change its stance on what qualifies as a facility’s maximum power threshold, SEIA said in its rehearing request , despite extensive review of other provisions in the FPA. Therefore, the group alleged that FERC’s ruling “is a violation of the APA and an abuse of discretion.”

“Broadview Solar’s docket was open before the Commission issued the PURPA NOPR, but at no time during the course [of the] rulemaking proceeding did the Commission indicate it was considering revising its long-standing rule setting for determining a Qualifying Facility’s maximum power production capability,” SEIA said.

If FERC does not reverse its decision, the commission at least needs to clarify that current QFs will not be subject to the Broadview ruling when applying with the commission for recertification under PURPA, SEIA said.

In the Broadview case, the developer updated its filing with the commission to reflect an upgrade to its facility: The solar array now has a 160 MW of gross capacity, up from an original 104.25 MW, though its net capacity remains at 80 MW. In total, the facility can never produce more than 80 MW of solar at one time because it’s connected directly to direct-current-to-alternating-current inverters.

For this reason Broadview, along with Commissioner Richard Glick in his dissent, argued the facility’s QF status should not change, but the majority of the commission sided with utility trade group Edison Electric Institute, which said the facility was “artificially” limiting its capacity in order to meet the QF threshold.

FERC’s ruling was a departure from the precedent it set in the 1981 case Occidental Geothermal, Inc., when it first determined a facility’s eligibility under PURPA should be based on net capacity. The commission did not provide a reasonable explanation for this departure, SEIA said.

“There is no logical policy justification for the Commission’s new Broadview rule, other than discouraging or otherwise limiting investment in solar QFs,” the group wrote.